BAKU, Azerbaijan–Credit unions have the opportunity to make a significant contribution to the development of the Azerbaijan’s agricultural sector, according to one CU official here.
“Credit unions in Azerbaijan are mainly aimed at financing the agricultural sector, because loans of 2,000-3,000 manats are not a significant amount for other sectors of the country's economy,” Jalil Suleymanov, chairman of the board of the Azerbaijan Credit Unions Association, said, according to AzerNews.com. “Farmers sometimes need such amounts for tillage and other work.”
As press time, one Azerbaijani manat equaled approximately 59 U.S. cents.
Suleymanov said in most cases banks are not interested in issuing loans to small and medium-sized businesses in the regions, with the exception of a limited number of entrepreneurs, and even that lending is limited.
There are 78 credit unions in the country and while they face challenges, there is high demand for their services, according to Suleymanov.
"At the moment there is a high demand in the agricultural sector, in particular in the field of cotton growing. From the side of the cotton growers, there is a high demand for loans for the year in the amount of 1,000-2,000 manats in accordance with the turnover,” he told AzerNews.com. “But donor companies avoid working in this direction," he said.
This year cotton is planted on 132,000 hectares in Azerbaijan and next year it is planned to plant 100,000 hectares with cotton. As for November 2018, 215,000 tons of cotton have been harvested, according to AzerNews.com.
Partnered with Enterprise Development Fund
The livestock sector is also increasingly in need of loans, the report stated, noting that since 2007, loans worth 210 million manats have been made.
“Suleymanov also noted that all Azerbaijani credit unions work with local capital and the share of problem loans in the total portfolio of unions is much lower than that of large credit organizations,” AzerNews reported.
Suleymanov said the CU association also added the Enterprise Development Fund has been working closely with credit unions.